Tag Archives: gas

China Buys Canadian Oil, Gas And Expertise

State-owned PetroChina has been splashing its cash this week–$1.6 billion to buy out BHP Billiton’s stake in the controversial Australian offshore Browse liquefied natural gas project, and $1.2 billion for a 49.9% stake in a joint venture with Encana to develop the Canadian company’s Duvernay shale oil and gas field in Alberta, with a further $1 billion of investment promised over the next four years.

Chinese energy companies acquiring overseas production assets is scarcely news. They have now spent approaching $30 billion this year alone on oil and gas fields. PetroChina’s two deals look like chump change against, CNOOC’s $18 billion acquisition of Nexen, the largest Chinese overseas acquisition and which has only recently been approved by the Canadian government.

What strikes this Bystander as interesting about the two latest PetroChina deals is the expertise as much as the assets that they bring. China has deepwater, natural gas and shale fields in abundance, but not much experience or expertise in exploiting them. CNOOC got its first deepwater drilling platform into the South China Sea only in May this year. Acquiring the know-how has become a priority. The Duvernay shales, in particular, are geologically similar to some of China’s deep shales. Learning how to tap them is something PetroChina can not only take to the bank, but back home, too.

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Hu Adds Heft To China-Central Asia Pipeline Opening

We’ve noted before China’s expanding reach into energy-rich Central Asia. A sign of how strategically important that is to Beijing is President Hu Jintao’s presence (again) in the Kazakhstan capital Astanta on Saturday to open the Kazakh leg of the new 1,800 kilometer pipeline connecting China and Turkmenistan.

Hu will be going onto Ashgabat, the capital of Turkmenistan, for the official opening on Tuesday of the whole pipeline, which runs from a CNPC-operated gas field there back to Xinjiang, itself a reminder of the delicate balance Beijing has to strike between its handling of its Muslim minorities and its Muslim Central Asian neighbors whose oil and gas it is extracting.

Another sign of the shifting sands in the region is that while in Turkmenistan Hu will attend a summit of Central Asian leaders. They rarely gather except at meetings organized by Russia.

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New Fuel Tax Introduced With Offsetting Price Cuts

The long-anticipated fuel tax rise has come into effect, with, as expected, an offsetting cut in gasoline pump prices.

The National Development and Reform Commission has announced that fuel consumption tax will increase from 0.2 yuan a liter to 1 yuan a liter on gasoline and from 0.1 yuan  a liter to 0.8 yuan a liter for diesel.  At the same time, the retail price of gas has been cut by 0.91 yuan  per liter, and of diesel by 1.08 yuan, as of midnight Thursday.

Corresponding tax rises and price cuts for commercial gasoline and diesel and jet fuel were announced the day before to take effect on January 1st. Six categories of tolls for road and waterway maintenance and management will be scrapped the same day.

The changes are part of a drive to make China’s energy use more efficient through market based pricing, but the actual impact will be small to start with. No chances are being taken with depressing demand given the overall economic slowdown.

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China’s Gas Tax Expected ‘Within 20 Days’

Fuel taxes are to be imposed within 20 days, according to China Daily, quoting reliable sources in the latest in a series of leaks prepping their introduction. This will reverse the subsidies now given to refined petroleum products. The aim is to make China a more efficient consumer of energy. The 60% fall in global crude oil prices from their record high in the summer provides an opportunity to tax domestic fuels such as gasoline and diesel with less initial impact on pump prices. The initial rate is expected to be 25% or a little over a yuan a liter.

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